Labor Department offers employers overtime loophole


Published: Tuesday, January 6, 2004 at 6:01 a.m.
Last Modified: Monday, January 5, 2004 at 11:25 p.m.
WASHINGTON - The Labor Department is giving employers tips on how to avoid paying overtime to some of the 1.3 million low-income workers who would become eligible under new rules expected to be finalized early this year.
The department's advice comes even as it touts the $895 million in increased wages that it says those workers would be guaranteed from the reforms.
Among the options for employers: cut workers' hourly wages and add the overtime to equal the original salary, or raise salaries to the new $22,100 annual threshold, making them ineligible.
The department says it is merely listing well-known choices available to employers, even under current law.
"We're not saying anybody should do any of this," said Labor Department spokesman Ed Frank.
New overtime regulations were proposed in March after employers complained they were being saddled with costly lawsuits filed by workers who claimed they were unfairly being denied overtime. But the regulations themselves have stirred controversy over how many workers would be stripped of their right to overtime pay. The issue is being seized by Democrats in their attempt to win back Congress and the White House.
A final rule, revising the 1938 Fair Labor Standards Act, is expected to be issued in March. The act defines the types of jobs that qualify workers for time-and-a-half if they work more than 40 hours a week.

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